Western Diplomat: To obtain sanctions relief from world powers Iran will "not offer substantive cooperation with IAEA."

VIENNA, - Iran may be holding back from working with a United Nations
investigation into its nuclear program to use it as a bargaining chip
in pursuit of significant sanctions relief or other concessions in
broader negotiations with world powers.

That could explain why UN
nuclear inspectors once again returned empty-handed after talks last
week in Tehran, where they tried to overcome obstacles to a long-stalled
inquiry into suspected atomic bomb research by Iran.

Iran has
suggested at various times in the past that it would expect a "kind of
reward" for cooperating with the International Atomic Energy Agency
(IAEA), a Western official said, making clear he saw no rationale for
this.

If this is Tehran's thinking, a year-long effort by the
IAEA to unblock its investigation looks unlikely to succeed as long as
separate diplomacy between the six major powers and Tehran remains
deadlocked.

"They don't want to offer substantive cooperation,"
one Western diplomat said after the IAEA's latest stab on Jan. 16-17 at
coaxing the Islamic Republic into starting to address questions about
its atomic activities.

Another envoy in Vienna, where the UN
agency is based, described the IAEA's roller-coaster negotiations with
Iran as a "well-practiced dance" by Tehran of "two steps backwards, one
step forward."

The failure to achieve a breakthrough in the most
recent of a series of largely fruitless meetings between the IAEA and
Iran marked another setback for diplomatic efforts to resolve the
stand-off and head off the threat of a new Middle East war.

Both
Iran and the United States, Britain, France, Germany, China and Russia
say they want to resume talks after a seven-month hiatus. But the two
sides' priorities diverge: the powers want to curb Iranian nuclear work
of potential use in developing atomic weapons, while Iran wants
sanctions scrapped and their "rights" to enrich uranium formally
recognized.

They have yet to announce a date and venue and as
delays continue, Iran is amassing more nuclear material that could be
turned into bomb fuel if refined further. Israel has threatened military
action to foil any nuclear weapons capability in Iran.

The
powers, known as the P5+1 as they group the five permanent,
veto-wielding members of the UN Security Council along with Germany,
want peaceful guarantees on Iran's enrichment program and Iranian
transparency toward the IAEA.

Iran, which says it seeks only
peaceful nuclear energy from enrichment, is keen above all for the West
to remove sanctions expanded last year to block its economically vital
oil exports.

"Tehran apparently is seeking to withhold
cooperation with the IAEA in order to increase leverage vis-a-vis the
P5+1," said Daryl Kimball of the Arms Control Association, a US-based
research and advocacy group.

After the previous meeting in
mid-December, the IAEA said progress had been made and that it expected
to seal the deal in this month's session. But after the two days of
talks last week it said "important differences" remained.